17 May 2019 13:01

Cherkizovo cuts capex by 14% in Q1

MOSCOW. May 17 (Interfax) - Cherkizovo Group, one of Russia's largest meat producers, reduced capital expenditures by 13.7% year-on-year to 1.7 billion rubles in the first quarter of 2019, the company reported in a press release.

"Investments in the grain segment and new wean-to-finish pork facilities were significant projects of capital expenditures in the reported period," the company said.

The group's net debt rose to 62.1 billion rubles as of March 31 from 49.7 billion rubles a year earlier. Gross debt increased to 70.1 billion rubles as of March 31 from 52.5 billion rubles a year ago. At the end of the first quarter of 2019, long-term debt accounted for 45% of the debt portfolio and amounted to 31.7 billion rubles. The effective cost of debt was 5.2% as of March 31, down from 7.0% a year earlier. Subsidised loans and credit facilities made up 36% of the debt portfolio in the first quarter of 2019, up from 29% in the same period of 2018.

Total government grants for compensation of interest expenses amounted to 0.4 billion rubles.

Cherkizovo said it is optimistic about the outlook for 2019. "We see stronger demand for our products, evidenced by the growth of our value-added portfolio, coupled with better pricing environment compared to the last year. The integration of the acquisitions that we've made in late 2018 is on track," the company said.

The company said it remains committed to its long-term strategy of focusing on the domestic consumer, whom its serves via various channels, and diversifying its presence across the regions. Cherkizovo said it "will opportunistically explore export opportunities predominantly in the neighbour countries, Middle East, and Asia."